Portland Bankruptcy: Debt Management vs. Oregon Bankruptcy

When looking to alternatives to filing a bankruptcy you need to understand the pros and cons. This article submitted by one of our Portland bankruptcy lawyers can show you  your options and show that sometimes a bankruptcy filing is your best option.

Bankruptcy Alternatives: Debt Management
Debt management, in Oregon, is  where you bring on an attorney to work or negotiate directly with those who hold your debt. At times debt management will be able to lower your monthly payments to creditors and loan holders. Debt management many times will be able to lower the interest rate that you pay on some debts. It can also function as a way to reduce or lower the total amount that you owe.

Unfortunately the process of debt management will not work with all or the major part of your debts. Mortgage payments, vehicle payments, tax obligations, student loans, payday loans and medical bills are often excluded or rejected from most forms of debt management. So when looking at debt management you need to understand that it wont be able to deal with all the same debts as a bankruptcy filing would be able to. Debt management really is best suited to deal with personal loans and credit cards.   
The biggest problem with debt management is that repayment arrangements only work if someone can afford large monthly payments or can commit to the payments for an extended period of time. Frequently, the attorney or debt management agency will arrange for itself to be paid its fee for services before any payments are made to your creditors. Recent observers have noted that many of the debt management agencies now advertising on TV and radio are actually owned and organized by the credit card industry.

Another issue arises that the debt management program is not enforced by law.  You or the credit card company can pull out at any time.  Also you need to be able to make large monthly payments or have large cash payments available to fund the plan that you and your lawyer come up with.

Bankruptcy Alternatives: Bankruptcy is Enforced by Law
When looking at your options with debt management its important to consider that a bankruptcy filing and discharge is an order of the U.S. Court in Oregon.  The creditors must abide by it or risk a lawsuit from your bankruptcy lawyer.  The process for a Chapter 7 runs about 90-120 days and for a Chapter 13 bankruptcy, a couple of years.  If you follow the courts order you can be sure of your outcome.  The same is not true for debt management.

Bankruptcy Alternatives: Conclusion
Its always a good idea to talk to a knowledgeable lawyer about your options under the U.S. Bankruptcy Code and Oregon Bankruptcy law and see whether debt management or a bankruptcy court filing would work best.

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